UNFCCC COP14: Components of a Post-2012 Climate Deal

Components of a post-2012 climate deal Finance and the global climate agreement Rob Bradley Jonathan Pershing World Resources Institute

Where does finance come from?
Where is it needed?
Adaptation
Technology
Forests
Developing country mitigation
Trade and sectoral approaches
What next?

Private sector investment flows UNFCCC Funds Other multilateral e.g. World Bank CTF Other governmental e.g. ODA increase, bilateral R&D Non- governmental e.g. NGOs, universities

Source: IPS ‡ ‡ Indicative total * Total deals in 2006, including venture capital, private equity, corporate R&D, public R&D, asset and project finance and mergers and acquisitions (Source: New Energy Finance) Source: WRI, with data from New Energy Finance, UNCTAD Statistics, UNFCCC, and The World Bank

Adaptation
Perhaps strongest prospects for public finance
Tricky area for private finance
Adaptation Fund will likely not handle all relevant finance
… but can have an important steering role

Deploying adaptation finance

Adaptation WRI Expert: Heather McGray Key Publication Weathering the Storm: Options for Framing Adaptation and Development Financing Adaptation: Opportunities for Innovation and Experimentation

Cumulative Energy Investment Source: IEA, WEO, 2006 Technology finance

Scale of current/necessary deployment Source: Stern Review

Technology finance WRI Expert: Britt Childs Staley, Hilary McMahon, Jenna Goodward, Dennis Tirpak, Deborah Seligsohn, Tan Xiaomei, Weng Weili Coming up Juice from Concentrate: investing in solar thermal electricity Case studies of technology deployment in China New Five components of a new financial deal on technology under the Convention From positions to agreement: technology and finance under the UNFCCC

Forests
Lots of options in the Bali Action Plan
Carbon markets may not be the panacea some hope
Policies and measures need to be implemented and supported in a variety of ways
Developed country actions will count too – get more added value to more sustainable forest practices

Policy Options
Accuracy, Availability and Transparency
Curb over-capacity
Ensure legal supply
Monitoring
Planning and incentives
Law enforcement
Social forestry
Fire prevention
Certification
Source: World Bank 2006 Accurate timely maps Forest Management Units

Forests WRI Experts: Florence Daviet, Fred Stolle, Susan Minnemeyer, Lars Laestdius, Crystal Davis, Smita Nakhooda Key Publication REDD Flags Beyond Carbon Financing Sustainable supply chain procurement guide Upcoming: Governance Forest Indicators

Trade and sectoral approaches
Concerns over competition and trade
Unilateral measures being taken by developed countries won’t necessarily succeed
But they may disrupt the multilateral process
Sectoral approaches that address competitiveness concerns have been ruled out in UNFCCC

WRI Experts: Robert Heilmeyer, Jake Werksman, Taryn Franzen Key Publication Leveling the Carbon Playing Field: International Competition and US Climate Policy Design

Developing country mitigation
Measurable, reportable and verifiable actions and support
Bali offers a more common and more differentiated approach
Greater variety means greater complexity
Actions more rooted in national policies and plans are more likely to be implemented
Financial support is likely to vary among countries and actions

WRI Expert: Hilary McMahon, Taryn Fransen, Smita Nakhooda Coming soon Measuring the way to a new climate agreement New paper with Tsinghua University on MRV in China

Implications
Financing a climate response is possible, but there is no easy solution
Policy design can help enhance political support for finance
Carbon markets are important, but not magical
Finance is likely to flow through a variety of mechanisms
But how will real life intervene?

A new wrinkle: market behavior Shanghai Index FTSE 100 Index S&P 500 Index Nikkei 225 Index BOVESPA Index Source: http://www.bloomberg.com , 9 October 2008

National Stimulus Packages Source: USEPA: April 2007, US GHG Inventory unemployment, auto industry support, housing, small businesses, energy independence, infrastructure, disaster assistance $100.3 billion - US tax cuts, infrastructure & other projects, support to SMEs & low-income households, $10.8 billion S.Korea Infrastructure projects, new oil refinery, support small- and medium-sized businesses $22.8 billion Mexico direct cash to households, loans for small businesses, reduction of highway tolls, subsidies to farmers $277 billion Japan Environment R&D, public/private partnerships in infrastructure investment, tax measures for companies, funds to households $101 billion Italy tax holiday for new cars, subsidies for enhancing energy efficiency of buildings, new infrastructure investments $29 billion Germany welfare housing, infrastructure, social & environmental services, economic restructuring, natural disaster relief, etc $586 billion China cut sales tax, help for small businesses, low earners and households £20 billion Britain Pensioners, low and middle income earners; home purchase assistance $6.7 billion Australia Package Description Amount Country

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UNFCCC COP14: Components of a Post-2012 Climate Deal

by World Resources Institute (WRI) on Dec 05, 2008

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UNFCCC COP14: Components of a Post-2012 Climate Deal — Presentation Transcript